I'm Velda Addison, senior editor of energy transition and renewables with a Hart Energy Live exclusive interview with Sandhya Ganapathy, CEO of EDP Renewables North America. 

Velda Addison, senior editor of energy transition and renewables, Hart Energy: Welcome, Sandhya. So, EDP Renewables recently released its business plan for 2023 to 2026. It forecasts global investments of about 20 billion euros. They're also plans to deploy more than four gigawatts in renewables each year. So what's in store for North America?

Sandhya Ganapathy, CEO of EDP Renewables North America: Thank you so much for the opportunity. North America is one of our core markets. Today, we have a global install capacity of renewables of around 15 gigawatts, of which we have a bit more than half in North America. And in line with that, in terms of the new business plan from ‘23 to ‘26, we are talking about roughly 40% to 45% of the overall capital coming to North America. I mean, it's a fantastic market. We see great demand, of course, spurred by the IRA now. There is a lot of volume that's coming from solar, from wind, from storage across all technology. So it's a fantastic opportunity for us and we want to make sure that as a responsible player in this space, we are contributing our share of it.

VA: So tell me more about demand. What's the outlook?

SG: Yeah, so the U.S. has been consistently doing about between 25 and 30 gigawatts of renewable capacity every year. Where we are today is that because of the IRA, the Inflation reduction Act, there is a lot of incentives. And then there is this accelerated view in order to further the energy transition. We are seeing a lot of demand coming from corporates, which has been significant over the last four, five years. They have driven the U.S. demand really. We see more than 60% of overall offtake, what we call as power purchase agreements being signed by corporates because a lot of them have net zero goals and they want to accelerate in their clean energy ambitions. We are also seeing a lot of cold retirements being announced, and so there is a lot of demand from the utility space. So overall, there is demand, there is growth, there is this eagerness to move to more affordable, reliable, secure energy, and that is renewable proposition. 

VA: So demand is present and it's growing. Tell me about some of the projects you all have underway to help meet this demand.

SG: We are talking about growing at about two gigawatts per annum. EDPR has a very low, sort of diversified footprint in North America. We have a presence in Mexico, we have a presence in Canada. But in addition to that, as far as the U.S. is concerned, we are present in all major electricity markets. So whether we call it [PJM Energy Market], MISO [Midcontinent Independent System Operator] [California’s] CAISO, WEG, we are present across. We also want to do a significant amount of solar in this part of the two gigawatts that I mentioned about. Traditionally we have been very wind focused, but now we are in line with the market and are also doing a lot of solar. So I would say it makes a good healthy balance between wind, solar, storage. Of course, all of these onshore. We also have a separate, offshore entity which is doing a lot of work both in the East Coast as well as West Coast of the U.S.

VA: So we're here at CERAWeek by S&P Global, and recurrent themes at the conference have been hydrogen, of course, and the Inflation Reduction Act as you have mentioned. So let's talk hydrogen. How do you see the energy industry's focus on green hydrogen driving demand? 

SG: I think where hydrogen is today is where batteries were 10 years back. It's super important that we are focused on this technology. It is super important because the amount, the scale and the impact that it can have globally is so significant. In the case of the U.S., it was always globally, it is always a question of economics for hydrogen. But now that we have the IRA and with that the $3 per kilogram production tax credit, it's fantastic. It's fantastic to make the economics work. We are seeing a lot of demand coming from industrials. The key thing is, we have to figure out how to make it transportable, how to make it fundable so that it is accessible across the country. But we are seeing a lot of demand. We are investing a lot in terms of resources and time and I think the next couple of years would be critical for hydrogen, both for us, as well as for the sector.

VA: Turning to the IRA. It's seen as improving economics for the clean energy industry. So how do you anticipate it changing the clean energy landscape for EDPR?

SG: Yeah, I think a couple of things. Today we are in an environment where capex is really high, and that's been spurred by a few factors: inflation, of course—the pandemic has led to supply chain disruptions over the last two, three years. Commodity prices in general have gone up, interest rates have gone up. And so we are in this environment where we have huge capex, as well as high interest rates. So that is having an impact in terms of overall pricing, but that's not renewables alone. Gas prices were, you know, we are talking about $4, $5 gas prices as we look forward into the future. All of this means to say that people need to have certainty in terms of what is the projected energy price they will be able to get over the next 15, 20 years.

That's the beauty of renewables because no other source of energy can provide that clean, comfortable, stable electricity prices, which is critical for manufacturing, which is critical for industries across. And so when we are looking at renewables, of course in the long run, we expect capex to come down, of course in the long-run [with] interest rates, we all know where the markets would be, but, we are also seeing a lot of technological innovation. So all of this will, along with the subsidies that we have in the case of the IRA, will bring cost down and make it affordable because renewables today are affordable. Even today, the demand for renewables is significant. And that means to say that even at the higher prices in terms of capex and in terms of interest rates, renewables is still the cheapest form of energy out there. And so I'm very, very optimistic.

VA: Sandhya, thank you for taking time to speak with us. We'll be revisiting these topics quite a bit in the next few years. Learn more about the energy transition and renewables at hartenergy.com